Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
, see all updates

Corporation Tax: computation of income: directors fees received by companies


Nominee directors

Where a company (the first company) has the right to appoint a director to the board of another company (the second company) because of its shareholdings in, or a formal agreement with, the second company, the director appointed in this way is a nominee director.

If a nominee director is obliged to hand over to the first company any fees or other emoluments the director receives from the nominee directorship, and does in fact do so, if the first company accepts liability, the fees and other emoluments may be treated as income of the first company.

Directors other than nominee directors

This practice may be extended to cases where the first company has no formal right to appoint a director to the board of the second company provided:

  • the director appointed has to hand over, and does hand over, fees earned to the first company,


  • the first company:
    • is resident in the UK and is liable to CT, or
    • is non-resident, but is trading through a branch or agency in the UK so that its income is chargeable to CT under CTA09/S5(3), formerly ICTA88/S11 (2), and the director’s fees are included in that income, and
    • is not a company over which the director concerned has control.

In this context ‘control’ has the meaning given to it by CTA10/S1124, formerly ICTA88/S840, but taking into account the rights and powers of the director’s:

  • spouse or civil partner,
  • children,
  • children’s spouses or civil partners, and
  • parents.

Claims that code NT or BR should accordingly be applied to a director’s fees etc are dealt with as below.

For cases involving nominee directors {.filledcircle}

  • details are needed of all directors holding directorships with companies as nominees of the first company,
  • evidence is needed of the first company’s right and power to appoint directors to the board of the second company (or companies).

For cases involving other directors

  • confirmation is needed that the directors’ fees which are the subject of the claim are included in the income of the first company liable to CT,
  • confirmation is needed that the first company is not under the control of any director concerned.

For all cases

  • confirmation is needed that the directors concerned are obliged to hand over to the first company any fees etc, received from the second company,
  • the first company must agree that it will accept CT liability (or IT liability for a case where the first company is not within the charge to CT) in respect of the directors’ fees which are handed over to it,
  • the first company must notify HMRC of any change in the arrangements which may affect the concessionary practice.

Information may be sent to PT Ops.

Personal Tax, Product & Process - Employment Income Technical may be contacted:

  • in any case of doubt or difficulty, or
  • although the strict requirements of the above are not satisfied, it is claimed that a director’s remuneration should be treated as income of a company to which it is handed over.

See CTM02150 for provisions which apply to events after 5 April 2003, when ITEPA03 came into effect.